More on my fiction writing

March 15, 2018

The kingdom and the power

The Salt River Project was recently in the news, with proposed pay increases including $251,000 a year for board President David Rousseau. The story noted that this was more than Gov. Doug Ducey ($95,000) or Phoenix Mayor Greg Stanton ($88,000). SRP backed off following the news in the Arizona Republic. The real day-to-day boss in the new general manager, Mike Hummel, who will make $1.04 million. Despite the modest title, this is a position of immense influence. Former general managers include heavyweights Jack Pfister and Dick Silverman.

Phoenix lacks engaged moneyed stewards such as Bill Gates and Paul Allen in Seattle, or major headquarters such as Amazon. This only magnifies the power of SRP. It is no ordinary utility, even though it supplies electricity to the Phoenix metropolitan area along with Arizona Public Service. But much of what it does happens behind the scenes. SRP likes it that way.

The Salt River Project is a unique entity. Unlike the Tennessee Valley Authority or the Bonneville Power Administration, both created during the New Deal as public works to address the Great Depression, SRP is not a federal agency.

Rather, it is a hybrid private-state organization consisting of two arms. First is the Salt River Valley Water Users Association, which began in 1903. The first Newlands Act reclamation project, the association consisted of farmers and ranchers who pledged their land as collateral for low-interest bonds to pay for Theodore Roosevelt Dam. This followed the disastrous droughts on the 1890s and the failure of private enterprise to build a waterworks, notably the Arizona Canal, to match the potential of the burgeoning agricultural empire of the Salt River Valley. The dam also provided hydroelectricity.

The second arm was created in 1936 when the Legislature took advantage of a New Deal program allowing no-interest bonds to be sold for agricultural improvement through state government districts. Named the Salt River Project Agricultural Improvement and Power District, it was shortened to Salt River Project. This rococo governance continues today, adding to the SRP's opaque nature. Case law, statutory law, and federal law govern the Salt River Project, but it has tremendous latitude. Unlike APS, it doesn't need Corporation Commission approval for rate increases, to take one example.

The eight dams and seven reservoirs on the Salt and Verde rivers, along with hundreds of miles of major canals and small "laterals" built by SRP revolutionized agricultural production in the valley. By the 1960s, some 600,000 acres were under cultivation. Salt River Valley produce was shipped and sold across the nation. It was essential to Phoenix's rise as a major metropolitan area. By 1959, SRP provided 85 percent of the city's water. SRP also delivers electricity to large segments of the metro area (more than 1 million customers) and has a statewide cluster of power plants, including part ownership of the Palo Verde Nuclear Generating Station. The association manages the 13,000-square-mile watershed of the Salt and Verde. Few other organizations — excepting the federal government itself — contributed more to Phoenix's rebirth and success.

Its importance was shown by the headquarters being in the beautiful "government block" downtown (above) in the first half of the 20th century, before moving to more expansive quarters in Tempe north of the river. "Taking your water," as an association landowner, is a time-honored obligation. As I recall, my great aunt had to perform this task on Sunday night to water her acreage.

Next to widening roadways, SRP was most responsible for much of the loss of Phoenix's tree canopy. Trees once lined the canals, where people swam and even waterskied. These started coming down in the 1950s. The draining and cleaning of the canals was an annual ritual (performed during World War II by Italian prisoners of war).

For some time, SRP was ambivalent about the Arizona v. California lawsuit and the drive to win the Central Arizona Project. In his book Rivers of Empire, Donald Worster makes the point that in arid, irrigation-dependent places ("hydrological societies"), power accrues to those who control the water. Although water law in the West and Arizona is incredibly complex, the SRP was accustomed to its place at the top.

The CAP was built, a federal entity that is designed to bring 1.5 million acre-feet of water to Phoenix and Tucson. This allowed for a vast expansion of the urban area, far outside the SRP zone. Although it was pitched for decades as a way to sustain agriculture and stop groundwater pumping, California presciently argued that Arizona would use it for urban development. California was right, although it lost the landmark suit. And Arizona continues its destructive extraction of groundwater. But throughout the battle for the CAP and the 1980 Groundwater Management Act and beyond — SRP officials and lawyers were there, often behind the scenes. One young attorney was future Sen. Jon Kyl.

The kingdom and the power come with controversy. For example, like APS the Project hasn't been particularly friendly to solar power. This continues the tragic dissonance with the International Solar Energy Society being founded in Phoenix in 1954. Now this leading organization is in Germany. Elon Musk's SolarCity sued SRP, claiming it was using monopoly power to levy excessive charges on solar customers. SRP responds, like most legacy utilities, that the costs are needed to maintain its grid. The case has been heading for the Supreme Court, although a settlement is possible. SRP does have a modest renewable energy program, but a SolarCity settlement might be pathbreaking. Candidates are also running to make SRP more friendly to green energy.

The Salt River Project comprises Phoenix's only in-state source of renewable water supplies. This fact looms large as climate change and oversubscription to the Colorado River make the CAP a questionable bet for the long-term. Among SRP's biggest challenges is protecting the Verde watershed from encroachment by exurban sprawl users upriver and their influential backers at the capitol and in the Real Estate Industrial Complex.

Phoenix's quality future is smaller, denser, shadier, retreated to the footprint of the Salt River Project. Or things will get very brutal sooner than you think.

Comments

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Well I remember going down to the end of the street with my Dad to sign up for an hours worth of water to irrigate our lawn. Going back a week later to learn that "our time" to block the ditch and divert the flow was at 2AM on a Thursday morning.
It's almost impossible to explain this to someone today.

My dad was a SRP Zanjero. In the 50s i swam the canals. Particulary after a long hot day in the lechuga and uva campos. And once a year i used my postion to gain early access to the canals to bag fish from Granite Reef to Skunk Creek when SRP drained the canals for cleaning.
And then there was my first day as a Freshman at Glendale High School that the White Russians kidnapped me and tossed me into the canal and laughed as they threw empty beer cans at me as i floated west. I got out on the North side near a gate an hotfooted it home. I didnt go back for my books as i noted they ran over them with their car. Today SRP dosent drain and clean the canals every year. They have an out of state company that moves fish to and from various locations in the canal?

Both SRP and APS contribute mightily to political candidates including candidates for the AZ Corp. Commission that regulates them. They are both major supporters of ALEC. Should it be legal for public utilities to contribute to the campaigns of those who regulate them? Why should they be allowed to use rate payer money to support any political candidates? Oh, I know! Money is speech and precluding them from doing so would be an infringement on their free speech since public utilities are people just like any other corporation.

Who controls the purse or is Robert Mosses of SRP? The board I assume? If I understand the board is elected based on how much land you own, Wikipedia said 5 acres 5 votes. Does a renter in Tempe have a vote or input? If not than this sounds like a feudal system controlling the most precious commodity in Arizona.

Second, Jon will you ever reference or understand Javons principal? Efficiency does not mean decrease use of resources. As you point out the CAP has increased water consumption. More “renewable” energy will lower the cost of electricity and thus more of it will be used. Those damns and nuclear plants will still be online. Imagine convincing yahoos to close them so we can increase the cost of energy...the only true way to lower overall consumption.

Putting a leash on greed in Phoenix is like having a hippo dance "Swan Lake." In the bastion of unfettered Libertarian Capitalism that is Arizona, social responsibility is seen as akin to communism sentiment. You're "On Your Owna" in Arizona.